NZ dollar weakens as traders bank profits heading into Xmas
NZ dollar weakens as traders bank profits heading into quiet holiday period
By Tina Morrison
Dec. 24 (BusinessDesk) - The New Zealand dollar weakened overnight as traders who had benefited from its recent strength took profits in the absence of any data likely to push it higher heading into the Christmas holiday period.
The kiwi declined to 67.86 US cents at 8am in Wellington, from 68.14 cents at 5pm yesterday. The trade-weighted index fell to 73.79 from 74.02 yesterday.
The local currency has advanced 0.9 percent so far this week as a string of weaker US economic data kept the greenback out of favour. Traders who benefited from so-called 'long' bets anticipating the kiwi's rise are now taking profits heading into a quiet holiday period with a lack of data to drive further moves in the currency.
"The recent US dollar weakness that we have seen and weakness in the commodity markets has been a little bit overturned overnight as people bank profits for the holiday period," said Stuart Ive, senior foreign exchange dealer at OMF. "It's a case of people banking profits as there's no real reason for the kiwi to gain any further at this point in time without any new data so really it is a case of people squaring up their books for the holiday period."
The local currency had pulled away from its resistance level at 68.30 US cents, Ive said, adding that trading was likely to be quiet today.
The New Zealand dollar slipped to 93.83 Australian cents from 94.17 cents yesterday, dropped to 45.60 British pence from 45.93 pence, was little changed at 62.22 euro cents from 62.23 cents and fell to 81.99 yen from 82.46 yen.
It declined to 4.3948 yuan from 4.4121 yuan yesterday. China's central bank said it would extend the yuan's trading hours on the Shanghai-based foreign exchange market next month, allowing trading in China to overlap with Europe as it moves to internationalise its currency.